207 N.W. 536 | S.D. | 1926
The plaintiff in this action was a creditor of the South Dakota Central Railway Company, and the defendants were stockholders in said company. The company became insolvent and unable to pay plaintiff’s claim, and plaintiff, claiming that defendant’s stock was not fully paid, brought this action to recover from defendants to the extent' of the unpaid balance on their stock.
At the commencement of the trial defendants demanded a jury trial. This demand was denied, and the court proceeded to try the case as a court case. The ruling on this question is assigned as error, and presents the first question for determination. Section 2492, Rev. Code 1919, reads as follows:
“An issue at law must be tried by the court or by the judge. An issue of fact ¡for the recovery of money only, or of specific real or personal property, must be tried by a jury, unless a jury trial be waived as provided in section 2524. Every other issue is triable by the court which, however, may order the whole issue or any specific question of fact involved therein, to be tried by a jury, or may refer it as provided in sections 2530 and 2531.”
The provision of this section that provides that issues of fact for the recovery of money only must be tried by a jury refers to common-law actions as distinguished from suits in equity. This case was originally placed on the jury calendar at a regular term- of court, but the court, being of the opinion that it was a court case, transferred it to the court calendar. This was done without objection from any of the defendants. The jury cases fot said term of court were dispensed of, and the jury was dismissed for the term. It was when the case was reached for trial on the court calendar that the question was first raised. This was too late: Defendants by their conduct waived their right to a trial by jury even if such right ever existed. In 35 C. J. Sec. 104, p. 197, it is said:
“The constitutional'right to a jury trial in civil cases is mere privilege intended solely' for the benefit o f the parties litigant and may be waived by them.”
The “appellant waived his right to a jury trial when he did not timely except to the ruling of the court placing the same on the court calendar, and when, without such exception, he allowed the jury to be dismissed.”
And in Subelia v. Jelgerhuis, 144 N. W. 125, 32 S. D. 648, we said:
“The defendant waived his constitutional right to demand that the trial be by jury, if indeed he had not already done so by failing to give notice of trial. He thereby made of it a court case.”
It is next contended by appellant that plaintiff’s cause of action was barred by the statute of limitations. This contention is based upon the fact that appellants had been holding the stock, by reason of which plaintiff claims its right of recovery, more than six years before plaintiff’s right of action accrued. Whether this .would be a good defense in a proceeding between the corporation and the stockholders is not an issue in this case. This action is based upon a statutory right in favor of the creditors of the corporation and against the stockholders whose stock is not paid for, and the statute of limitations did not commence to run until the creditors’ cause of action accrued. This was not until some time in 1914 or 1915, and the action was commenced in 1917. Parmelee v. Price, 70 N. E. 725, 208 Ill. 544; Morgan v. Allen, 103 U. S. 498, 26 L. ed. 498; Glenn v. Liggett, 10 S. Ct. 867, 135 U. S. 533, 34 L. ed. 262; Hospes v. N. W. Mfg. Co., 50 N. W. 1117, 48 Minn. 174, 15 L. R. A. 470, 31 Am. St. Rep. 637.
It is next contended by appellants that they were not in any legal sense stockholders in the said railway company, and therefore were not liable for the debts of that company. This contention is based upon that provision of our Constitution (article 17, Sec. 8), which provides that:
“No corporation shall issue stocks or bonds except for money, labor done, or money or property actually received; and all fictitious increase of stock or indebtedness shall be void.”
Appellants take the position that, having acquired their stock in violation of this constitutional provision, that it is void and should be treated as though it had never existed. However potent
Defendant Baker seeks to avoid liability on the ground that he had parted with his stock for a valuable consideration, and had delivered his certificates of stock to another party in 1916, and prior to the commencement ,of this action. He claims he was promised $25 per share, but that no part of the consideration had been paid, and the stock had not been transferred on the books of the corporation. He testified also that the party to whom he had sold the stock had died in Portland, Or., some four or five years before 'the trial.
This precise question was before the Supreme Court of Iowa in Shugart v. Maytag, supra, an action brought by a creditor of this same corporation against stockholders living in that state. One of the defendants in that case, as did defendant Baker in this case, cited and relied on what was said by this court in State Banking & Trust Co. v. Taylor, 127 N. W. 590, 25 S. D. 577, 29 L. R. A. (N. S.) 523. That was a case where a stockholder in á corporation pledged his stock to one of his creditors to secure an indebtedness and delivered his certificates of stock to such creditor. While the stock was SO' pledged another creditor attached the same as it appeared of record on the books of the corporation. There
Lastly, it is' contended by appellants that the equities of the case are all with them, and that the legal rights of the parties are so evenly balanced that the equities should prevail. We cannot assent to either of these propositions. If any equities are involved they are with the plaintiff, who in good faith fumishejdi labor and material to this corporation, and the legal rights are clearly with the plaintiff. If the stockholders had- paid par value for their stock as the law required them to do there would have been no liability on their part to the creditors of the corpora tion.
The judgment and order appealed from are affirmed.